• Denise Cheng: To Prepare for the Future, Lower the Voting Age

    Apr 22, 2015Laurie Ignacio

    The Next American Economy's video series on “The Good Economy of 2040" continues this week with Denise Cheng from the MIT Center for Civic Media and the San Francisco Mayor’s Office of Civic Innovation.

    The Next American Economy's video series on “The Good Economy of 2040" continues this week with Denise Cheng from the MIT Center for Civic Media and the San Francisco Mayor’s Office of Civic Innovation.

    Cheng is an advocate of open government initiatives like open data and participatory budget projects. But if she had to pick only one thing to ensure a good economy in the future, she would lower the voting age to 16 “so people are actually getting their civic education while they’re still in high school," ensuring that "they have the best information to make an informed vote.”

    Read more about initiatives to lower the voting age to 16:

    "Scotland let 16-year-olds vote. The US should try it too.” (Vox)

    "Hyattsville becomes second U.S. municipality to lower voting age to 16" (Washington Post)

    Denise Cheng is an innovation fellow with the San Francisco Mayor’s Office of Civic Innovation. She has an eclectic background in community building, the future of news, and labor in the peer economy—specifically, worker support around the growing pool of people who depend on piecemeal income. Cheng has spoken, written, and appeared widely in NPR, Harvard Business Review, and Next City, at the New Museum and Personal Democracy Forum, and more about the sharing economy. She received her MSc from MIT and is an affiliate researcher with the Center for Civic Media at MIT Media Lab.

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  • Online Learning Is No Substitute for Campus Community Engagement

    Apr 22, 2015Zach Lipp

    “Within 5 years the world's best education will be available online and it will be free,” said George Mason University professor Tyler Cowen in a September 2013 interview. “Arguably that's already the case.”

    “Within 5 years the world's best education will be available online and it will be free,” said George Mason University professor Tyler Cowen in a September 2013 interview. “Arguably that's already the case.”

    When I heard the claim last summer, I took notice. I was and continue to be an undergraduate with a love for online learning. I have watched dozens of lectures recorded on YouTube, enrolled in an unrealistic number of edX, Udemy, and Coursera courses, and taken a Codecademy track or two. But while I love digital learning, I also love the traditional campus experience, and I do not believe the former alone can suffice.

    The public sphere is rife with claims that online education opportunities can subvert the American higher education system. The most recent barrage comes from Kevin Carey’s new book The End of College, which has generated many media reports and reactions. Missing from the debate are the voices of students: not just traditional college students, but digital learners as well. As a representative of both groups, I see the gaps in online learning.

    While record numbers of students are attending colleges, they remain a relatively elite set of institutions. The costs of attending college are high and only growing, and student loan debt has expanded dramatically in recent years. Meanwhile, a treasure trove of learning opportunities is available online for free. Some see this as spelling the demise of the college; however, MOOC (Massive Open Online Course) completion rates are alarmingly low.

    Yet even if MOOCs had the demographic pull and (at least) the completion rates of American colleges, they would still earn the scorn of academics. Digital course companies and colleges support competing purposes of education. As Harvard College Dean Rakesh Khurana said in his opening address this year, college can be either transactional or transformational. Yes, some students will always approach college as transactional, but a digital education, I believe, is necessarily transactional.

    The college experience consists of much more than courses: as I have mentioned before, campuses teem with opportunities for civic engagement. Colleges around the country host speakers, rallies, and student organizations like the Roosevelt Institute | Campus Network, engaging students in communities in ways an Internet connection cannot. Moreover, these communities extend beyond their campuses. By fostering student education and activism, campus organizations foster citizenship.

    Colleges are anchored in diverse communities that provide ample learning experiences. My involvement with the Rethinking Communities project , which provides a framework for students to expand and improve their college’s impact in their local communities, leads me to question how to leverage these relationships. My most meaningful lessons took me into the cities beyond my campus. We can learn an immense amount by engaging in our local communities, and there is no opportunity for this type of learning in an exclusively digital college. My experiences tell me digital education falls short of developing and engaging citizens, and as a result, so does the claim that online courses will replace physical ones.

    Zach Lipp is a junior at Concordia College and a Rethinking Communities Braintrust member.

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  • Andrew McAfee: Immigration Reform Is Key to Our Economic Future

    Apr 17, 2015Laurie Ignacio

    Our series on The Good Economy of 2040 continues with MIT’s Andrew McAfee. To build a better economy over the next 25 years, McAfee says, we’ll need a more open immigration system that welcomes skilled workers. "When the world’s most talented, ambitious, tenacious, capable people want to come here and build their lives and their careers…it absolutely makes no sense to me that we put all these ridiculous Kafkaesque barriers in their way."

    Our series on The Good Economy of 2040 continues with MIT’s Andrew McAfee. To build a better economy over the next 25 years, McAfee says, we’ll need a more open immigration system that welcomes skilled workers. "When the world’s most talented, ambitious, tenacious, capable people want to come here and build their lives and their careers…it absolutely makes no sense to me that we put all these ridiculous Kafkaesque barriers in their way."

    To read more about skilled immigration, check out the following articles:

    Getting a Visa Took Longer Than Building Instagram, Says Immigrant Co-Founder (Bloomberg)

    The basics of the US immigration system (Vox)

    Andrew McAfee is a principal research scientist at MIT and cofounder of its Initiative on the Digital Economy, where he studies how computer technologies are changing business, the economy, and society. His 2014 book on these topics, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (co-authored with Erik Brynjolfsson), has been both a New York Times and Wall Street Journal top ten bestseller. He writes two blogs, academic papers, and articles for publications including Harvard Business Review, The Economist, the Wall Street Journal, and The New York Times. He’s talked about his work on The Charlie Rose Show and 60 Minutes, and at TED and the Aspen Ideas Festival. McAfee was educated at Harvard and MIT.

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  • Clinton's Executive Pay Comments Show We're Still Too Focused on Fairness

    Apr 17, 2015Susan Holmberg

    Hillary Clinton surprised many progressives earlier this week with her remarks on a model populist issue. "There’s something wrong when CEOs make 300 times more than the typical worker. There’s something wrong when American workers keep getting more productive…but that productivity is not matched in their paychecks.”

    Hillary Clinton surprised many progressives earlier this week with her remarks on a model populist issue. "There’s something wrong when CEOs make 300 times more than the typical worker. There’s something wrong when American workers keep getting more productive…but that productivity is not matched in their paychecks.”

    Indeed. From 1978 to 2013, executive compensation at American firms rose 937 percent, compared with a sluggish 10.2 percent growth in worker compensation over the same period. In 2013, the average CEO pay package at S&P 500 Index companies was worth $11.7 million. Numbers for 2014 are just starting to be released, but Microsoft’s Satya Nadella is thus far topping the list at $84 million in mostly stock awards.

    Too often the CEO pay debate, which tends to come into focus during our annual rite of corporate proxy season, hinges on a question of ethics. Is paying CEOs excessive amounts fair to workers? No, of course not, as so many fast food workers, whose CEOs make approximately 1,200 times more than they do, rightfully voiced yesterday.

    One of the problems, however, with expressing CEO pay as a fairness issue is that it is too often countered with accusations of envy. And this doesn’t get us very far. (Note that Clinton’s language—“there’s something wrong”—plays into the fairness framing.) Our efforts to reform CEO pay would be much stronger if we also talked about how bad the status quo is for our economy and thus our society.

    There are two main reasons CEO pay should be a concern to anyone who cares about economic prosperity in the United States, including Hillary Clinton. One reason stems from the total amount CEOs are paid. The other relates to the structure of CEO pay, in particular that the bulk of their compensation comes in the form of stock options and stock grants.

    Total Amount of CEO Pay

    A handful of high-profile economists—Thomas Piketty, Joseph Stiglitz, and Robert Reich, to name a few—have begun to make the case that a high degree of economic inequality precipitates financial instability because it leads to a decline in consumer demand, which has tremendous spillover effects in terms of investment, job creation, and tax revenue, not to mention social instability.

    Research clearly demonstrates that the growth of executive pay is a core driver of America’s rising economic inequality. According to the Economic Policy Institute, “[e]xecutives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005.” Another calculation by economists Ian Dew-Becker and Robert Gordon finds that the large increase in share of the 99.99th percentile is mostly explained by the incomes of superstars and CEOs.

    The Structure of CEO Pay

    Several studies show that equity-heavy pay, because it makes executives very wealthy very quickly, distorts CEOs’ incentives, inducing them to take on too much risk. Instead of bearing this risk themselves, they shift it onto the rest of society, as we saw during the financial crisis. This model also encourages executives to behave fraudulently, as in the backdating scandals of a decade ago, and lessens their motivation to invest in their businesses. According to economist William Lazonick, in order to issue stock options to top executives while avoiding the dilution of their stock, corporations often divert funds to stock buybacks rather than spending on research and development, capital investment, increased wages, or new hiring. To top it all off, these pay packages cost taxpayers billions of dollars due to the performance pay tax loophole.

    Hillary Clinton’s comments on CEO pay could be a signal that she is willing to adopt at least some of the progressive messaging championed by Senator Elizabeth Warren. We can enhance that message by making better economic arguments for why we need to reform skyrocketing CEO pay.

    For more, see my primer on the executive pay debate.

    Susan Holmberg is a Fellow and Director of Research at the Roosevelt Institute.

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